private funds

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Securities and Exchange Commission, SEC, Building in Washington DC

SEC defines the phrase “as part of a regular business” to capture private funds and other market participants that take on liquidity-providing roles.

By Marlon Q. Paz, Stephen P. Wink, Naim Culhaci, and Jessmine Lee

The Securities and Exchange Commission (SEC) adopted new rules that expand the definition of “dealer” and “government securities dealer” under the Securities Exchange Act of 1934 (Exchange Act), requiring registration by market participants that take on significant liquidity-providing roles. The February 6…

Securities and Exchange Commission, SEC, Building in Washington DC

The priorities highlight emerging and core risk areas for investment advisers, broker-dealers, and other entities, including cybersecurity and crypto assets.

By Laura Ferrell, Aaron Gilbride, Marlon Q. Paz, Jamie Lynn Walter, Stephen P. Wink, Naim Culhaci, and Deric Behar

On October 16, 2023, the Securities and Exchange Commission’s (SEC) Division of Examinations (the Division) published its annual examination priorities for 2024 (2024 Priorities), which focus on “certain practices, products, and services that [the Division] believes present potentially heightened risks to investors or the integrity of the U.S. capital markets.” The Division will prioritize areas that pose emerging risks to investors or the markets, as well as examinations of core and perennial risk areas. The 2024 Priorities include certain of these focus areas, but are not an exhaustive list.

The 2024 Priorities are primarily organized by entity, with just four thematic topics broken out separately as applicable to a wide range of market participants: (1) information security and operational resiliency; (2) crypto assets and emerging financial technology; (3) regulation systems compliance and integrity; and (4) anti-money laundering. Notably, ESG was not specifically identified as a priority in adviser reviews for the first time in years.

The Division will continue to prioritize examinations of advisers and investment companies that have never been examined, including new registrants, as well as those that have not been examined for a number of years.

The amendments have a substantial impact on private fund managers.

By Laura N. Ferrell, Aaron Gilbride, Michael Milazzo, Jamie Lynn Walter, Mike Hart-Slattery, and Haley Hohensee

On August 23, 2023, the Securities and Exchange Commission (SEC) adopted a final rule package (each a Rule, and together, the Rules) that modifies the regulation of private fund advisers under the US Investment Advisers Act of 1940, as amended (the Advisers Act).

Among other things, the Rules require…

While the findings are not new or surprising, they do serve as a reminder of the regulator’s focus on advisers’ fiduciary and supervisory duties.

By David Berman, Nabil Sabki, Laura N. Ferrell, Deric Behar, and Anna Lewis-Martinez

On June 23, 2020, the Securities and Exchange Commission’s (SEC’s) Office of Compliance Inspections and Examinations (OCIE) published a Risk Alert describing various compliance deficiencies observed in recent examinations of registered investment advisers that manage private equity funds or…